Catalyst launches first real estate Opportunity Zone fund

Catalyst said May 20 that it is launching an inaugural real estate Opportunity Zone fund, which plans to raise $150 million. Catalyst, of Salt Lake City, has invested in more than $6 billion of real estate projects in the United States across various asset classes.


Catalyst Opportunity Funds Launches $150 Million Double Bottom-Line Opportunity Zone Fund
Renowned Impact Investors Jim Sorenson, Patrick McKenna, and Jeremy Keele Have Teamed up to Invest in Undercapitalized American Communities
SALT LAKE CITY — Catalyst, a double bottom-line private equity firm, today announced the launch of their inaugural real estate Opportunity Zone fund. Catalyst plans to raise $150 million for Fund I to invest in high-potential but historically overlooked, small and mid-market U.S. Opportunity Zone communities with high growth potential. Catalyst is committed to leveraging Fund I to maximize both financial returns for investors and social impact for communities by investing in projects that increase access to high-quality jobs, healthcare, education, and housing opportunities for local residents. Catalyst expects to raise a second Opportunity Zone fund focused on investments in job-creating operating businesses in the same communities.
Established through the Tax Cuts and Jobs Act of 2017, Opportunity Zones are an innovative community development incentive that offers historic tax benefits for investors who make long-term transformative commitments in the designated 8,700 low-income communities spread across every US state and territory. These benefits include deferral of current capital gains through the end of 2026, up to a 15 percent tax reduction on current gains, and the elimination of capital gains taxes on appreciation if investments are held for at least 10 years.
Catalyst’s team incorporates significant real estate and business investing experience with cross-sector public and philanthropic expertise to execute on its place-based strategy. Catalyst’s senior leadership team has: developed or invested in over $6 billion of real estate projects in the United States across various asset classes; founded or invested in over 150 companies totaling over $3.5 billion market capitalization; and structured over a dozen public-private partnerships focused on addressing the needs of low-income communities around the country.
“We believe that over a 10-year Opportunity Zone investment horizon, our comprehensive strategy will maximize financial returns and create better outcomes for individual and families,” said Jim Sorenson, a Co-Founder and Catalyst Managing Partner. “Our fund is differentiated by our holistic approach to redevelopment that identifies and partners with best-in-class local developers, community and business leader, government officials, and economic development leaders.”
The Opportunity Zone program was designed to encourage investment to tackle persistent poverty and spur business growth in undercapitalized areas. Leveraging its nationwide investor, developer, and community networks, Catalyst has already identified and is diligencing more than 50 high-impact investment opportunities across 18 states totaling some $2.15 B in total project value.
Catalyst is targeting high-potential markets around the US that are uniquely positioned to benefit from Opportunity Zone investment. Catalyst focuses on overlooked markets where it sees economic signal, latent demand drivers, and a high degree of engagement from local government, nonprofits, philanthropy, and other key community stakeholders.
“We find projects in smaller, out-of-the-way markets that are undervalued and have great potential but are off the radar of institutional capital,” said Patrick McKenna, a Co-Founder and Catalyst Managing Partner.
Catalyst holistically invests in both human capital and the built environment via mixed-use developments that align with local priorities and are supported by community stakeholders. Catalyst is currently vetting dozens of mixed-use projects in Opportunity Zones around the country that are sponsored by highly aligned impact-oriented developers and that incorporate some or all of the following elements:
– Workforce affordable housing for entrepreneurs, health workers, creative class, public safety officials, educators and other backbones of the community
– Co-working, creative office, maker space and incubators or accelerators that lower barriers-to-entry and support local small businesses and entrepreneurs
– Community health clinics providing cost-saving, preventative healthcare services locally
– Space for adult skills training and high-quality educational programs for kids
– Grocery in communities where local residents lack access to affordable / healthy food options
“We’re partnering with communities across the U.S. to unlock economic growth and improve social, health, and educational outcomes,” noted Jeremy Keele, a Co-Founder and Catalyst Managing Partner. “Our holistic community investment approach aligns with the original purpose and intent of the Opportunity Zone program. We believe Catalyst could become a national model of best practices for maximizing both returns and impact in these communities.”
Catalyst is working to create a robust impact measurement and reporting framework for the benefit of investors, project partners and local community stakeholders tracking how Catalyst’s and its partners’ investments are improving the community over time. The framework, which is based on impact measurement and reporting guidance jointly developed by the U.S. Impact Investing Alliance and Georgetown’s Beeck Center, will track observable, near-term outputs directly attributable to Catalyst investments as well as longer-term project results and administrative data reflecting how individual and community outcomes are changing over time.
Catalyst’s team is strategically assembled and uniquely positioned to maximize the economic and social benefits of Opportunity Zones. Jim Sorenson is a world-renowned entrepreneur who has built highly-successful companies in industries ranging from technology and life sciences to real estate and private equity, and is a pioneer in the impact investing sector. Patrick McKenna is a veteran technology and real estate investor who has invested in excess of 45 companies, and who founded HighRidge Venture Partners to invest in early stage companies, as well as One America Works, a non-profit focused on building connections between Silicon Valley and mid-sized American cities. Jeremy Keele is a recognized national leader in impact investing, public-private partnerships, and the Opportunity Zone program and former CEO of the Sorenson Impact Center, who has significant experience in government, law, business, and impact measurement. The team also includes Kristian Peterson, a senior real estate private equity investor who recently joined Catalyst from a leading global investment management company with approximately $40 billion under management.
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